IEIM901540 - Sale of Goods

The Model Rules define goods as “any tangible property” and a tangible object is one that can be touched. Consequently, the sale of any goods which are intangible, such as rights or vouchers, do not fall within the definition and are not in scope of the rules. This will also include the sale of items, such as online tickets, which are intangible but could be printed out as they are essentially intangible in nature.

However, where a voucher entitles a user to redeem goods or services that fall within the definition of a Relevant Activity, the sale or issue of that voucher reflects the commitment of a Seller to provide that activity and does not change the nature of the goods/services provided. The voucher should therefore be treated as the provision of that Relevant Activity. This remains the case even if the voucher is not subsequently redeemed for the underlying Relevant Activity.

There may be instances where vouchers are issued by a Reporting Platform Operator, rather than the Seller, which may later be used as Consideration via its Platform in exchange for the provision of Relevant Activities. In such instances, the redemption of the voucher should be treated as the payment of Consideration in exchange for a Relevant Activity.

A Seller may sell multiple listed items in the same transaction to the same buyer. This may for example allow the buyer the benefit of saving on the cost of postage. In these circumstances, it is HMRC’s view that the transaction may be considered a single Relevant Activity.

A Seller may also sell multiple items in a single listing for one set price. For example, a Seller sells 5 items in a single listing for a set price. This is a single Relevant Activity.

A business selling its goods using its own website, app or other software is not within the scope of the rules. In such cases the Seller and the Platform are the same entity and the website, application or software is not a ‘Platform’ because it does not connect third party Sellers to users (see 901100).

The same principle applies where an entity sells goods to a related entity such as a group company using its own website, application or other software. An entity is related to another entity if either entity controls the other or the two entities are under common control. For this purpose, control includes direct or indirect ownership of more than 50% of the vote and value in an entity.